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17. U.S. Government Represses Labor Unions in Iraq in Quest for Business

The Progressive, December 2003
Title: Saddam’s labor laws live on
Author: David Bacon

Left Turn, March/April 2004, v. 12
Title: “Ambitions of Empire: The Radical Reconstruction of Iraq’s Economy”
Author: Antonia Juhasz

Faculty Evaluators: Haidi LaMoreaux Ph.D., Susan Garfin Ph.D.
Student Researchers: Katie Drewieske, Adam Stutz

In the Wall Street Journal on May 1, 2003 an article leaked the confidential Bush Administration documents outlining “sweeping plans to remake Iraq’s economy in the US image. Hoping to establish a free-market economy in Iraq the US is calling for the privatization of state-owned industries such as parts of the oil sector. This all-inclusive plan for mass privatization of Iraq is divided into three stages. In the first stage corporations are not only able to establish their businesses in Iraq, they are also able to own Iraqi resources, including two of the most precious Iraqi resources: oil and water. In the second stage, all Iraqi resources would be turned over to private ownership. The final stage includes the establishment of a Free Trade Area in the Middle East paving the way for US domination of the entire region.

The beginning of the corporate invasion was signaled by the many multi-million dollar contracts that were handed to corporations via the Bush administration. The US Agency for International Development (USAID) secretly sent out bids for contracts. Iraqis, humanitarian organizations, the United Nations and any non-US led business were left out of the contract bids. Although Halliburton and Bechtel are some of the most well known corporations that have received these contracts, there are a plethora of others that have been included in these secret bids:

DynCorp/Computer Sciences Corp
Flour Intercontinental
Creative Associates International Inc.
Research Triangle Institute

With Halliburton now responsible for the extraction and redistribution of oil, Bechtel has been handed the contract to oversee the management of water systems and waste water management. Being the largest private company in the world responsible for water management, (it is involved in over 200 water and waste water treatment plants around the world) Bechtel’s contract has been extended to include the distribution of water just as Halliburton’s was for oil. With this in mind, the private ownership of Iraqi water supplies could have devastating consequences for the Iraqi population.

In addition to the privatization of the Iraqi resources, the U.S.-led Coalition Provisional Authority (CPA) in Iraq has kept in place many of Saddam Hussein’s anti-labor practices.

In 1977, Saddam Hussein purged unions and made radical parties illegal. Many labor leaders were executed or fled the country to live in exile. Ten years later, Hussein reclassified the people who worked in large state enterprises as civil servants. That meant that the government employed 70 percent of Iraqi workers, and made it illegal for them to form unions or to bargain for better working conditions.

Since the Hussein regime fell last April 2003, workplace-organizing activity has exploded. Union organizers emerged quickly, spearheading a drive for better wages. A worker strike was held in Basra two days after British troops arrived. Workers demanded the right to organize and protested the appointment of a Ba’ath party official as the new mayor. Similar demonstrations have been going on throughout the country. 400 union activists met in Baghdad in June 2003 to form the Workers Democratic Trade Union Federation, and planned to reorganize unions in many of Iraq’s major industries.

But the CPA, while striking down almost all of Hussein’s other laws, has kept the ban on unions, keeping wages low and unemployment high (at about 70 percent). They are privatizing the state enterprises that employed most of the workers. As of December 2003, 138 of the 600 state-owned businesses were being offered for sale.

On Sept. 19, 2003, the CPA published Order No. 37, which suspends income and property taxes for a year and limits future taxes to 15 percent. Later that day, they issued Order No. 39, permitting 100 percent foreign ownership of businesses (except oil) and allowing repatriation of profits. Outright ownership of, access to, and profits from Iraqi oil fields is still under dispute – although it is likely that U.S. interests will prevail.

The CPA has set an emergency pay scale for Iraqi workers’ wages, which for most is $60 a month. This is the same wage scale that workers had under the Hussein regime. Benefits under Hussein included frequent bonuses, profit sharing, medical coverage, and food subsidies. There is no overtime pay under the CPA, no benefits, and an increase in the exchange rate has made imports and essential items very expensive. Workers have had a drastic cut in income since April 2003 as a result of CPA decisions.

Low wages aren’t the only problems unions hope to combat. Working conditions are exhausting and dangerous. Under the Hussein regime, the workday was seven hours long. Now a day shift is 11 hours, a night shift is 13 hours. Safety glasses and other safety equipment are virtually unknown in most industries. If workers get sick or hurt, they must pay for their own medical care and also lose pay for the time they miss. “Life has gotten much worse,” said one worker. “Everything is controlled by the coalition. We don’t control anything.”

Workers in the businesses to be privatized could face even more problems in the future. If they have no legal union, no right to bargain and no contracts, they may not be able to oppose the privatization of their plants and potential huge job losses. A plant manager in one industry seemed willing to talk to the union in his factory, but since finances and wages are controlled by the CPA, he is not able to sign any kind of contract with the group.

The factory manager pointed out that under the Hussein regime, the 3,000 workers were guaranteed jobs for life. He was not allowed to lay off anyone. But if his business were privatized he would have to fire about 1,500 people in order to make a profit; since there is no unemployment insurance, he will be killing those workers and their families.

Iraqi Labor Undersecretary Nuri Jafer says he would like to start an unemployment insurance program, but so far no country is willing to help fund it. Meanwhile, none of the $87 billion that Congress allotted for Iraq will go to increase wages or implement a large jobs program.

A delegation from U.S. Labor Against War – a group of American union and labor councils – visited Iraq in October to investigate conditions. They asked Jafer repeatedly whether or not the 1987 law banning unions would be repealed, but he would not answer the question. The British CPA representative at the Labor Ministry also refused to answer, and complained that the foreign union delegations that visited the ministry were wasting the Labor Minister’s time.

UPDATE BY DAVID BACON: The disaster that is the occupation of Iraq is much more than the war that plays nightly across U.S. television screens. The violence of grinding poverty, exacerbated by economic sanctions after the first Gulf War, has been deepened by the U.S. invasion. Every day the economic policies of the occupying authorities create more hunger among Iraq’s working people, transforming them into a pool of low-wage, semi-employed labor, desperate for jobs at almost any price.

The effects of U.S. policy on daily life, especially the economic situation of most Iraqis, go largely ignored in the U.S. media, although anyone walking the streets of Baghdad cannot miss them. Children sleep on the sidewalks. Sewage still pours into the Tigris River, and those who must depend on it for drinking or cooking continue to get sick. The violence of poverty is not held to be a violation of human rights in the United States – just one manifestation of the great division in the world between the wealthy, industrialized north, and the developing south. The U.S. does not recognize that human rights include economic and social rights, in part because they are collective rights of groups, social classes, or even nations.

The story on labor in Iraq detailed these violations of human rights. Most of the specific CPA decrees mentioned in the story, suppressing union rights and setting the stage for privatization, are unarguably violations of international human rights standards.

Conventions 87 and 98 of the International Labor Organization, guaranteeing freedom of association, makes the continued enforcement of the 1987 ban on unions illegal. Convention 135, preventing retaliation against workers for union activity, makes the arrests of union leaders, and their expulsion from their offices, illegal as well.

The story exposed not only the growing poverty of Iraqi workers, but the conscious effort to use a falling standard of living as an attraction for foreign investment. After the story appeared in The Progressive, the situation for workers and unions grew worse. Members of the national executive board of the Iraqi Federation of Trade Unions were arrested in December, along with leaders of the Union of the Unemployed of Iraq. In January and February, a wave of work stoppages and labor confrontations in the south hit Iraq’s key industries – oil and electrical generation. Worker resistance grew so heated that the occupation authority was forced to withdraw decrees which would have lowered wages even further.

In an especially Orwellian moment, George Bush even declared in his January State of the Union speech that U.S. intervention in Iraq would promote the formation of free trade unions in the Middle East. Nevertheless, as of April, the occupation authority continued to enforce the Saddam-era ban on union in most workplaces.

Few other media outlets picked up the story of the violation of Iraqi labor rights. A notable exception was the labor press, especially The Dispatcher (of the International Longshore and Warehouse Union) and the Guild Reporter (of the Newspaper Guild). This labor attention reflects the growing antipathy and opposition to the war and occupation among U.S. unions, a story in itself.

There was some attention on the radio, due in part to the efforts of the Institute for Public Accuracy. None of the major national daily US newspapers, however, and none of the television networks, have run any news stories at all about Iraqi labor and workers. Perhaps this is just an extension of their failure to cover unions and workers in the US, but given the need to develop the institutions of civil society in Iraq capable of governing the country, ignoring unions and their allied popular organizations seems a kind of willful blindness typical of the occupation generally.

The best source for continued and up-to-date information about Iraqi workers and unions can be found on the website of U.S. Labor Against the War, the national network of unions opposed to the Bush war policy.

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